May in major U-turn on social care funding

May in major U-turn on social care funding

In something of a U-turn, prime minister Theresa May has now said the Conservative government would set an “absolute limit” on the amount people pay for social care.

Over the weekend her original plans for funding social care, unveiled last week as part of the Conservative party general election manifesto, had been dubbed "a dementia tax". 

So after three days of mounting political criticism of her social care reforms Mrs May bowed to warnings from Tory candidates that it was hitting the party hard on the doorstep.

The Conservative party general election manifesto had promised people who move into residential care who already have the value of their property taken into account will start to receive state help when the value of their assets falls to £100,000, rather than £23,250.

But for those receiving care in their own home the value of their property will also now be taken into account in the means test – currently only their income and savings are taken into account – although they too will benefit from the asset increase from £23,250 to £100,000.

There was no mention of a cap in the manifesto.

Speaking at the launch of the Tory party manifesto in Wales today (22 May), Mrs May said: "This manifesto says that we will come forward with a consultation paper, a government green paper. And that consultation will include an absolute limit on the amount people have to pay for their care costs.

"There will be two million more people over 75-years-old in Britain over the next decade alone. Our social care system will collapse unless we make some important decisions now about how we fund it.”

Andrew Dilnot in his Commission on social care recommended that a social care cap be set at £35,000 while the last  government planned to introduce a social care cap of £72,000 in 2020 for residential care.

Commenting on the proposed social care change Dean Mirfin, technical director at equity release provider Key Retirement, said:  “If the proposed social care changes come to pass this will actually lead to an increase in demand for more advice. 

"The irony of the proposed changes is that a vast percentage of those receiving home care, especially full time home care, are typically funding some or all of the cost themselves with the core of funding for care by local authorities being for residential care.

"The devil as always will be in the detail, for example what if the property is jointly owned and the spouse is still residing in it? There are still many unanswered questions.”

Steven Cameron, pensions director at Aegon, said the pressing crisis in social care funding can only be solved through a clear, fair and long lasting agreement on what the state provides and what individuals will be expected to pay.

He said the original Conservative proposals left many facing an unlimited bill, with no state support until assets fell below £100,000, and no means for individuals to plan ahead to cover possible care costs while keeping inheritance aspirations intact.